Guangdong Xinbao Electrical Appliances (SZ:002705) Guoxin Securities·2025-09-01 11:29Investment Rating - The investment rating for the company is "Outperform the Market" [5] Core Views - The company experienced a slight revenue decline due to tariff disruptions, but its operational quality is steadily improving. In H1 2025, the company achieved revenue of 7.8 billion (+1.0%) and a net profit attributable to shareholders of 540 million (+22.8%) [1][3] - The company is actively optimizing its product structure and reducing costs to enhance profitability, despite facing challenges in overseas sales due to tariffs [1][3] - The company is expanding its multi-brand strategy in the domestic market to capture new growth opportunities [2][3] Revenue and Profitability - In H1 2025, the company's revenue from external sales grew by 2.5% to 6.07 billion, while domestic sales revenue decreased by 3.8% to 1.73 billion [2][3] - The gross profit margin improved by 0.3 percentage points year-on-year to 22.1% in H1 2025, with external sales gross margin increasing by 0.7 percentage points to 21.1% [3] - The net profit margin attributable to shareholders increased by 1.2 percentage points year-on-year to 7.0% in H1 2025 [3] Financial Forecasts - The company has adjusted its profit forecasts for 2025-2027, expecting net profits of 1.19 billion, 1.33 billion, and 1.46 billion respectively, with growth rates of 13%, 12%, and 10% [3][4] - The projected PE ratios for 2025, 2026, and 2027 are 11, 10, and 9 times respectively [4][3] Market Position and Strategy - The company is establishing manufacturing bases in Indonesia to enhance its overseas production capacity, aiming for normalized growth in international sales [1][2] - The company is diversifying its product offerings by setting up an appliance research institute and expanding into commercial machines, personal care, and smart gardening tools [2][3]